Frontier Airlines 2006 Annual Report Download - page 211

d. [Intentionally Omitted.]
e. In the event United exercises its Call Option (i) with respect to aircraft that are owned by Contractor or an affiliate of
Contractor, Contractor or such affiliate shall sell the aircraft to United for the purchase price set forth in paragraph f below, and (ii)
with respect to aircraft that are leased by Contractor, (A) if the leases to such aircraft may be assigned to United, United shall assume
the leases with respect to such aircraft, and (B) if the leases to such aircraft may not be assigned to United or a consent required cannot
be obtained, United shall sublease such aircraft from Contractor pursuant to a sublease with terms and conditions that are the same for
the remaining term as they are in the lease under which Contractor leases the aircraft. The effective date of any such sale, lease, or
sublease shall occur promptly after United’s election to exercise the Call Option but no later than [*] days after the notice.
f. In the event of a sale of an aircraft under paragraph e(i) above, the purchase price for the aircraft shall be [*].
g. In the event of a lease assumption under sub paragraph e(ii)(A) above, Contractor shall be entitled to either a full release
from all liabilities and obligations under such lease other than obligations relating to periods prior to the date of assignment to United
or United shall indemnify the Contractor from liabilities and obligations arising after the date of assignment. Contractor shall
indemnify United from all liabilities and obligations arising prior to the date of the assignment.
h. In the event of either a lease assumption under paragraph e(ii)(A) above or a sublease under paragraph e(ii)(B) above
United will indemnify Contractor against all liabilities arising from and after such assignment or sublease as the case may be.
Contractor shall indemnify United from all liabilities and obligations arising prior to the date of the assignment or sublease, as the case
may be. United shall also attempt to obtain a termination of all guarantees and return to Contractor (or reimburse) all applicable
deposits, letters of credit, or other collateral, but such release shall not include (and instead Contractor shall assign to the extent
assignable to United without further compensation, and if not assignable, Contractor shall subrogate its rights regarding any such
deposits or reserves held by or subject to the security interest of third parties to United or otherwise put United in the same position as
if such rights were assignable) any deposits or reserves held by or subject to the security interest of third parties related to the
maintenance or operation of the aircraft (including the airframe, any engine, any landing gear, or other component or part). United
shall assume all obligations of Contractor with respect to such lease or sublease as of the date of assignment or sublease and
adjustments shall be made between the parties for advance or arrears payment of rent. Such adjustment shall be the difference
between: (i) the cash amount of rent actually paid under the lease during its entire term as of the time of the assignment, and (ii) the
total rent due during the entire term of the lease times the percentage of the number of days since the beginning of the lease to the total
number of days in the entire term of the lease. In the event that United and the Contractor working together are unable to obtain a
release, for the benefit of Contractor, then United shall indemnify Contractor from and against all losses and liabilities of any kind
arising from and after such assignment or sublease in the same manner contemplated above.
i. Following a notice of termination from United, provided that Contractor does not operate the aircraft in a manner that is
prohibited under the terms of this Agreement, United shall continue to pay aircraft ownership costs as provided in Section VIII.A.8
hereof in respect of all aircraft subject to United’s exercise of its Call Option until (a) in the event United exercises its Call Option, the
effective date of the sale, lease or sublease of the respective aircraft as provided herein, or (b) in the event that United does not
exercise its Call Option, the date of expiration of its Call Option, the date of United’s written notice providing United’s early release
of its rights to such Call Option, or the date of United’s revocation of its exercise of the Call Option as provided under paragraph f, in
each case with respect to any particular aircraft.
j. For each aircraft that United acquires pursuant to the Call Option, United will purchase from the Contractor and take
delivery of a mutually-selected, proportional share of Contractor’s spare engines, rotable and expendable spare parts, and tools, owned
by Contractor to support the operation of the aircraft type. The aggregate proportional share of Contractor’s spare engines, spare parts
and tools shall be determined as the number of aircraft acquired by United as a percentage of the Contractor’s fleet, by aircraft type.
Spare parts, spare engines and tools will be purchased by United at fair market value in “as is where is” condition with fair market
value determined in the manner provided in paragraph f above.
k. In the event United exercises its Call Option with respect to any aircraft as to which Contractor has prepaid rent under the
terms of any lease or financing agreement, United shall reimburse Contractor for all prepaid rent to the extent not previously included
in the aircraft ownership costs previously paid by United or otherwise.
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 15, 2007 Powered by Morningstar® Document Research℠